| The USA is the single largest economy in the world, but the International Monetary Fund (IMF) has predicted that China's economy will pass the US in 2016 based on purchasing power parity (PPP). China attracted more foreign direct investment (FDI) than the USA in 2011 at 3% of nominal gross domestic product (GOP), while the USA's FDI was 1.7% of nominal GOP. FDT is a key ingredient in rapid economic growth, reduction in trade imbalance, job creation, increased living standards, and growth of small businesses; its increase is a measure of growing economic globalization. This was a quantitative ex post facto study using 20 years of quarterly secondary economic data for the USA and China from 1992 to 2011. To examine the influence of economic variables (EV) on FDI in USA and China, the researcher used descriptive statistics and Pearson correlation coefficient rand established the relationships between the EVs: structural change (SC), human capital (HC), market size (MS), economic growth (EG), exchange rate (ER), corporate tax (CT), and political stability (PS) with FDL The results revealed why the USA is lagging behind China in attracting FDI. There were more positive relationships between EVs and FDI in China's context than in the USA's context, with SC, HC, and MS showing the most significance ill both countries. Future studies could examine why economic growth and FDI in the USA were statistically significant, but showed a weak negative effect (r = -0.208): and why political stability and FDI in China were statistically significant, but showed a strong negative effect ( r = -0.481, p >. |
